Tasty wealth redistribution.

Order the Oysters, Pay for Waiter's Health Care

Lanhee Chen is a research fellow at the Hoover Institution who also teaches public policy at Stanford University. He was the policy director of Mitt Romney's 2012 presidential campaign.
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An article in the Los Angeles Times this week described how some of the city's top foodie destinations are beginning to impose a surcharge on patron checks to help cover the cost of providing health insurance to their employees:

The healthcare surcharge, the restaurant owners insist, isn't a political statement, but a way to offer valuable benefits to employees while maintaining their profits, which are slim even at the most successful establishments.

"We want our staff to have healthcare," said Josh Loeb, the co-owner of popular dining spots including Milo & Olive and Rustic Canyon. "It's not because we support Obama or don't support Obama, or are Democrats or are not Democrats."

It shouldn't be surprising that restaurant owners (or any business owners) would try to offset the cost of furnishing health coverage to their employees. Of course, the restaurant could simply price the items on its menu higher to account for health-care costs, but doing so risks the misimpression that it is simply trying to drive its margins higher. Assessing a fee or surcharge to help offset the cost of health insurance is the most transparent way for a business to inform consumers both that it is furnishing the coverage and what the cost of that coverage is.

The surcharge also helps consumers understand that the employer mandate in Obamacare affects a business's ability to hire and grow. To date, some businesses have responded to the mandate by adjusting their prices, hiring fewer workers or letting go of some workers -- but they haven't informed consumers of the costs. While not all businesses employ the 50 workers needed to be subject to the Affordable Care Act's employer mandate when it finally goes into effect in 2016, those who do would be smart to make the cost of coverage less opaque to their customers.

Liberals should be pleased that restaurants are doing this. First, the Los Angeles Times article notes that the restaurants that are assessing the charge aren't even required by the Affordable Care Act to furnish health coverage to their workers. So, the businesses are voluntarily making the effort to extend health coverage to their employees. (Conservatives should be pleased that the restaurants are choosing to extend health coverage to the employees rather than pushing them into the substandard care provided by Medicaid or the public subsidies administered through the ACA exchanges.)

Second, the surcharge is actually a progressive tax. I'm guessing that most middle-income Americans aren't choosing to dine on "truffled lobster Bolognese," so the incidence of the health-care surcharge falls disproportionately on higher-income consumers. In fact, the surcharge is an active form of redistribution -- from patrons who arguably can "afford it" to workers who need the help.

Yet the surcharge is already drawing complaints from the left. That's no surprise either, because many liberals would rather live in blissful ignorance of Obamacare's impact on consumers than confront the fact that the law has costs. This is a central tension for many supporters of Obamacare: They support the purported benefits of the law, so long as costs are passed to others, not to themselves.

The restaurant surcharge in Los Angeles finally gives liberals the chance to put their money where their mouths are.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Katy Roberts at kroberts29@bloomberg.net